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HomeMy WebLinkAboutCC Minutes - 02/16/05 WS MINUTES Eugene City Council Work Session McNutt Room--City Hall February 16, 2005 Noon COUNCILORS PRESENT: Jennifer Solomon, Betty Taylor, George Poling, Gary Papd, Bonny Bettman, Andrea Ortiz, Chris Pryor. COUNCILORS ABSENT: David Kelly. Mayor Kitty Piercy called the work session of the Eugene City Council to order. She announced that Mr. Kelly had requested no action be taken on the enterprise zone at the present meeting as he was unable to attend due to illness. Thus, action on the first item had been rescheduled for March 7. A. WORK SESSION: Economic Development Committee Recommendation on an enterprise zone Mayor Piercy stated that the day's work session would cover two topics related to the City's sustainability goals. She looked at sustainability in terms of economic growth and how the City could meet the goals of environmental regeneration, social equity, and profitability so that the City could protect its natural and human capital while supporting prosperity. She said enterprise zones were tools available to the City to target economic incentives and achieve the City's sustainability goals. She hoped the council would take this opportunity to undertake that targeting. City Manager Dennis Taylor said staff was before council at its direction to bring back an application for an enterprise zone prior to its submission to the State. He asked Denny Braud of the Planning and Develop- ment Department (PDD) to speak about the application. Mr. Braud recapped the direction from the City Council to pursue an application for an enterprise zone, given in October 2004, based upon the recommendation from the Mayor's Committee on Economic Development. He reviewed the committee's recommendations as outlined in the agenda item summary (ALS). He noted that there was competition for enterprise zones because of the State cap. He said the application materials were substantially complete, but it was up to the City Council as to when it should be submitted. He added that local criteria did not fall under the jurisdiction of the State and did not need to be included in the application, though it should be in place prior to the designation of the enterprise zone on July 1. He conveyed staff's agreement with the recommendation of the committee to move forward with the application. Ms. Taylor averred that until the State Legislature made changes regarding what qualifications the local jurisdiction could impose, it should not be considered. She said she would feel differently if it was limited to MINUTES--Eugene City Council February 16, 2005 Page 1 Work Session brownfield and redevelopment, to the expansion of small local businesses only, or to an unlimited geographic area. She was concerned with the mention of marketing to solicit people to come to the city of Eugene. She quoted Betty Niven who said, ;;If anyone is smart enough to find Eugene, I wouldn't lock them out but I wouldn't go looking for them and beg them to come." She felt most citizens did not want growth for the sake of growth. She recommended everyone read Better Not Bigger by Eben Fodor, which presented research on what happened in a community when a large, new employer was brought to the area. She said if the City was soliciting businesses that did not pay a living wage it was only adding to the social problems of the community. She felt the City was already experiencing problems with inadequate policing and school crowding because of growth. She preferred supporting a way to help local businesses grow in a gradual way. She commented that, like HMT, a company could come into Eugene with a tax break and leave before it was required to pay any taxes, although she acknowledged that HMT was being required to meet its tax liability. Ms. Bettman remarked that much had changed since 1986. She thought the City was utilizing the %ame old tool" in a changed environment. She supported a ;;very surgically targeted" enterprise zone. She only wanted to attract jobs that provided living wages and benefits. She quoted Ron Davis who said ;;Tax incentives pale when compared to the education and skill level of the work force." She wanted the City to seek a work force with a high level of technical acumen and skill. She noted that Bruce Blonnigan had called an enterprise zone a ;;race to the bottom." She reiterated that the City should focus its efforts on firms with high taxable values that would attract the best workforce. Ms. Ortiz said her biggest concern was that the proposed enterprise zone was in the middle of her ward. She was for supporting local businesses with family wage jobs, but did not think it prudent to allow another huge heavy industrial business in the Trainsong Neighborhood. She commented that a lot of pollution there had yet to be addressed. She added that no one really knew at this point what the railroad was going to do with its property. Regarding greenfield development, Ms. Ortiz asked if the environmental impact to the land and what the current uses of it were had been researched. Additionally, she was puzzled that crime statistics were included in the AlS. Mr. Pryor said the quality of life in Eugene was directly linked to the economic engine that made it work. He averred that businesses needed to be located in the city with mechanisms that were reasonable and he did not perceive the enterprise zone to be an unreasonable tool. He was concerned that Eugene would not be able to find an equilibrium at which it could support itself. He thought enterprise zones were a good idea. He noted that Hynix Corporation paid a good wage and now employed 1,000 people. Ms. Solomon commented that the enterprise zone was not the only tool to work with but it was one tool that had been successful in the past. She pointed out that more small businesses than large ones had utilized the enterprise zone incentives and were continuing to grow as a result of the investments that the enterprise zone had allowed them to make. She called the enterprise zone a very powerful way to foster small businesses. Mr. Poling also underscored the help that small businesses had received from the enterprise zone. Regarding the map on Attachment B that eliminated the greenfield areas, he averred they were areas that were already included in previous enterprise zones. He felt that to keep the area attractive and competitive, those areas should be kept in the enterprise zone. He noted that Hynix Corporation and Lanz Cabinets would be MINUTES--Eugene City Council February 16, 2005 Page 2 Work Session grandfathered in, adding that Hynix had been ~more than a good corporate citizen." He said Junction City had an enterprise zone and would take advantage of the economic incentives to foster job growth. He predicted this would result in Eugene residents commuting to Junction City which would run against State goals to reduce vehicle miles traveled (VMT). Mr. Pap~ appreciated Mr. Pryor's analogies. He was in favor of the enterprise zone and did not oppose inclusion of language regarding the caliber of workforce and wages that the City sought. In response to a question from Mr. Pap~, Mr. Braud stated that once the zone was in place, the City Council could change the boundary and adopt new criteria. Mr. Pap~ asked what of the 5,900 acres proposed for the zone was available for development. Mr. Braud replied that staff had embarked on the initial stage of a buildable land inventory. Roughly 1,700 acres had been identified as vacant land, of which 786 acres was available. He underscored that all of the data was not yet available to staff. He said he would bring more information to the next meeting. Mr. Pap~ wished to stress that 80 percent of the business expansion that had occurred under the enterprise zone had been undertaken by local small businesses. Mayor Piercy wished for clarification on how community standards would be defined. Mr. Braud explained that in the past the City Council had passed a resolution outlining its criteria. He recommended the criteria be focused on wages, benefits, job training, and other employment issues. He said the State statutes dictate which types of companies receive the tax exemption and the City could not change that. Mayor Piercy asked staff to take a look at the community standards and be sure that they lined up with what was being set forth. Mr. Braud responded that Attachment C did so. Mayor Piercy asked staff to put its interpretation of the standards together with what the council was proposing and then invite people to weigh in so that the council could make informed decisions. Ms. Taylor asked why the crime rates were referenced. Ms. Taylor acknowledged that small businesses had benefited. However, she averred that businesses in areas that did not have the incentives provided by the enterprise zone did not understand why some businesses were given the breaks based on geographical location. Ms. Taylor noted that some of the councilors had attended the Sustainable Business Conference. She thought they had learned good things and should build upon them. She said building on what the City already had was the way to proceed, such as the natural foods industry and the arts. Ms. Bettman stated that after the last enterprise zone, a committee had been formed which recommended a per-job cap. She supported instituting such a cap. She agreed that many small businesses had participated but wished to point out that the small businesses had received a small percentage of the actual dollars. Ms. Bettman averred that the enterprise zone was really a tool for increasing manufacturing businesses. She referenced comments made by the committee that supported economic development through high-paying knowledge-based jobs and the use of education and medical research as industries. She also thought the MINUTES--Eugene City Council February 16, 2005 Page 3 Work Session City should develop agricultural industries as well. Ms. Solomon noted that part of the greenfields were out at the airport. She opined it did not make sense, given the level of investment the City had made in the airport, to limit development around it. She observed that many airports were surrounded by industrial zones and those zones were desirable areas to develop in because of the proximity to air transportation. Regarding brownfield redevelopment, she pointed out that such areas were more expensive build upon and this hindered smaller businesses. Ms. Solomon said the question for her was not why the City should have an enterprise zone, but why not. Mr. Poling asserted that the City needed to make the application process as simple as possible following State guidelines. He urged the council to do it now so that if it was not granted in this year, the City would be in the queue and would be prepared so that the application could be resubmitted. Regarding the portion of money small businesses received, Mr. Poling stressed that smaller businesses may have received less of the overall amount of money in incentives, but they also contributed less in tax revenue. Mr. Pap6 ventured that $10,000 or $20,000 to a smaller company might mean more in the long run than $500,000 in incentives to a larger company. Ms. Bettman wished to point out that excluding greenfields from the zone did not preclude development. Rather, she said, it only precluded the potential development from receiving incentives. She asserted that when the City provided an incentive, it was foregone revenue for City services and schools. She thought it important to use it as a tool, but advised that it be leveraged in a way that provided the maximum public benefit with it. Mr. Poling referred to page 164 of the AlS and underscored that the City spent no money on private development projects. The enterprise zone only provided a tax exemption that would eventually provide tax revenues on new development. He wished to emphasize that without the development, one had an empty lot that generated tax revenue at a much lower rate. Ms. Solomon added that the exemption was only given to the portion of the business that was expanding. Mr. Braud affirmed that nothing that was on the tax rolls came off. Ms. Bettman said the boundaries in the motion she planned to place on the table would not have excluded the majority of the businesses that benefited from the tax breaks. Responding to concerns regarding the inclusion of crime statistics, Mr. Braud explained that the State required hardship criteria as part of the application. He said while crime was a hardship, it was not necessary to include that set of the statistics in the application. Regarding concerns about the focus on manufacturing jobs, Mr. Braud stated that it was one of the higher paying sectors of employment. He underscored that one of the reasons the community had a wage issue was that it had lost some of its manufacturing jobs. MINUTES--Eugene City Council February 16, 2005 Page 4 Work Session City Manager Taylor asked the council to direct any concerns and questions not yet articulated to staff as soon as possible because of the application deadline. In response to a question from Mr. Pap6, Mr. Braud said the Oregon Economic Community Development Director had ultimate approval authority for the zone. He noted he had participated in the past on a panel of communities that reviewed such applications and made recommendations for approval to the director. B. WORK SESSION: Sustainability Practices at the City of Eugene Mayor Piercy said the City had much to recognize and applaud regarding its sustainability efforts. She hoped the City Council would listen and give direction to the City staff to continue its work and to set sustainability goals for each department and across departments. City Manager Taylor called sustainability an area that the City could build on what was already in place. He said since the late 1990s sustainability had been a goal of the City and though much had been accom- plished, it still had a long way to go. Assistant City Manager Jim Carlson conveyed his regret that Mr. Kelly was ill, given Mr. Kelly's interest in the subject matter. He stated that Public Works Department (PWD) Director Kurt Corey and PDD Director Tom Coyle sat on the environmental policy team that oversaw the City's activities on sustainability issues. Mr. Carlson reminded everyone that sustainability had three elements: environmental stewardship, social equity, and economic vitality. He thought, overall, that the City made the greatest effort around environ- mental stewardship issues. He encouraged the council to think about the economic vitality and social equity portions of sustainability. Mr. Carlson reviewed Resolution No 4618 in the Agenda Item Summary. He felt much of what the City worked on in its planning centered on sustainability. He provided an overview of the information included in the memorandum entitled Update on Sustainability Activities. Mr. Carlson highlighted the City's Wetland Mitigation Bank, which enabled developers of properties to easily mitigate impacted wetlands and did it in a way that was better, as it resulted in a connected system of wetlands rather than protected, isolated half-acre plots. He stated that this was a key reason that the Public Works Department had been given the Julian Award for sustainability. Mr. Carlson spoke about the Business Development Fund loan program, which targeted money to small businesses working in the area of sustainability. He listed some of the recipients, such as the Plaza Latina Market, Holy Cow Vegetarian Foods, Green Gear Cycling, Co-Motion Cycles, New Day Bakery and World Caf& Continuing, Mr. Carlson highlighted the efforts to educate the local community through a brochure entitled The City of Eugene and Sustainability and other pamphlets, as well as the work done with volunteers throughout the City organization in programs such as the Neighborwoods Program and the parks volunteers. He noted that, in the effort to think globally and act locally, the City was working with Bob Doppelt and one MINUTES--Eugene City Council February 16, 2005 Page 5 Work Session of his graduate classes on an inventory of greenhouse gases in Eugene, the ultimate result of which could be the development of a local climate-change plan. In closing, Mr. Carlson stated that the City of Eugene was on the leading edge of progressive building methods. He felt the City was setting an example and leading in the community. Mr. Poling asked if other governmental bodies were participating in a similar program. Mr. Carlson said the Eugene Water & Electric Board (EWEB) was actively involved in some of the initiatives in the local community, though primarily focused on electric and water usage. He pointed out that Deborah Brewer, EWEB staff member, was present. He noted that a number of local government entities were involved in the clean diesel program. He said Eugene was likely involved in more sustainability oriented activities than most communities. In response to a question from Mr. Poling, Mr. Carlson stated that the bio-diesel the City used was produced in the Midwest and brought to the area by tanker cars. He predicted that a bio-diesel production facility would open in Portland soon, given the level of demand in the region. He indicated that bio-diesel fuel was derived from using restaurant grease byproducts. Mr. Poling wondered if there was any long-term damage to the diesel engines. Fleet Manager Carlos Davis responded that it lowered emissions and cleaned the engine. He underscored that it also reduced dependency on foreign oil. Mr. Carlson noted that the vehicles went through oil filters quickly as the engines were cleaned up. Mr. Davis stated that bio-diesel fuel could be used in any engine that uses diesel fuel. Mr. Pryor was very impressed by the work being done. He felt it demonstrated that the City ~got" the relationship between quality of life and quality of livelihood. He thought the degree to which the City could keep moving forward on this was desirable. He appreciated the Mayor reiterating the importance of sustainability in all areas. Mr. Pap~ concurred. He appreciated that the City was leading by example and not by regulation. He noted that the council had talked about pursuing policies on lead certifications. He asked if there would be a work session on that soon. Mr. Carlson indicated that time was reserved for this topic during the work session on April 27. Mr. Pap~ related that he had attended the Green Building Conference, held in Portland this last year, and was impressed with some of the progressive methods of construction that sought to minimize impacts. He listed some of the things that he had seen at the conference, including a non-water-using toilet. Mr. Carlson noted that waterless toilets were already slated to be installed in some City facilities. Mr. Pap~ noted that there were new buildings in process and asked if any were getting certified. Mr. Carlson said the Leadership in Environmental and Energy Design (LEED) standards were being used in design and construction but at this point the City was not applying for certification because of the cost. Mr. Pap~ expressed hope that, when the system became more streamlined and the cost was reduced, that the City would be a leader in green building projects. Mayor Piercy said City staff deserved laurels for all of the work that had been done but she did not want the City to rest on them. She hoped the City would consider this to be the first step in a discussion of not only MINUTES--Eugene City Council February 16, 2005 Page 6 Work Session how the City addressed sustainability but how the whole community could be engaged in both practices and products and carving out some new economic niches in the community. Mayor Piercy adjourned the meeting at 1:07 p.m. Respectfully submitted, Dennis M. Taylor City Manager (Recorded by Ruth Atcherson) MINUTES--Eugene City Council February 16, 2005 Page 7 Work Session